Tuesday's federal budget has been treated with the disdain it deserves.
Probably the funniest part of the night was when the Treasurer, Wayne Swan, talked about locking in spending and savings ''for 10 years and beyond''. Given the government hardly knows what's going to happen in the next 10 minutes, it's difficult to take seriously anything it says about what will happen in a decade.
The problem with the budget is that it has got in the way of something far more important. Two weeks ago the Prime Minister announced that on September 14 (the same day as the federal election) there will be referendum to change the constitution to give the Commonwealth government the power to make financial payments to local councils. The Commonwealth already does make payments to local government and this year councils will get about $2.6 billion from Canberra.
The justification for the amendment is that giving the federal government the explicit power to pay money to councils will remove any doubt about whether such payments are in fact allowed under the constitution. The lingering fear of both federal MPs and local councillors is that one day there will be a majority of judges on the High Court who are not left-leaning and who don't favour giving Canberra more power at the expense of the states, and such a majority will declare such payments from the federal government to be unconstitutional.
The referendum should be receiving more attention than it has so far. As soon as the Prime Minister said the proposal was ''modest'' (as she said twice), warning bells should have started ringing. Whenever a politician talks about a modest change the chances are the change is anything but.
A change of the sort the Gillard government wants would be a disaster for democracy in Australia. In the short term it will lead to less accountability over public services as potentially the same thing will be funded and administered by all three levels of government at the same time. In the medium term, local councils will become redundant as the Commonwealth government will itself seek to manage the programs which it funds local council to deliver. There is nothing the Commonwealth has ever financed which ultimately it hasn't wanted to run. Further, the Commonwealth will override local councils' own rules and by-laws in an effort for the it to get its own way. That is exactly what happened with the so-called Building the Education Revolution program. Local council planning laws were suspended because the Labor government wanted as many school halls built as quickly as possible.
In the long term, state governments will become obsolete. The Commonwealth government will use local councils (or what will be left of them) to deliver the services, particularly health and education that state governments currently provide but are financed by the commonwealth.
If the referendum passes, it will be the end of the idea that in Australia the power of government should be divided and distributed between the Commonwealth government and the states. Liberals and conservatives favour a federal system of government because only a federation allows for one level of government to act as a restraint against the other. The checks and balances of a federal system are why so many in the Labor Party want to abolish state governments.
It's no surprise the ALP and the Greens have enthusiastically embraced the referendum — $11 million was allocated in the Tuesday’s budget for publicity for the ''Yes'' case. But what is surprising that rather than fighting the referendum tooth and nail, the federal Coalition is trying to finesse the situation by avoiding saying exactly what its position is.
When Gough Whitlam in 1974 offered up a similar referendum to what Julia Gillard now wants, the Coalition campaigned vigorously against it and was defeated. In 1988, Bob Hawke's referendum was also defeated as result of strong opposition from the Coalition. In the past 25 years the federal government has not revealed itself to be any more competent or effective than in 1988. There's no justification to give it more power in 2013.
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